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Horizon Offshore, Inc. together with its subsidiaries provides marine construction services for the offshore oil and gas, and energy industries. Horizon provides offshore marine construction services to oil and gas companies on a contract basis in the US Gulf of Mexico, Latin America, Southeast Asia, West Africa, and the Mediterranean. Its nine-vessel fleet, which includes four pipelay/pipebury vessels, two derrick barges, one pipebury, one derrick/pipelay, and one diving support vessel. Horizon's primary services include laying, burying or repairing marine pipelines; providing hook-up and commissioning services; installing offshore production platforms and other structures, and disassembling and salvaging offshore production platforms and other structures. In 2006, Horizon provided offshore marine construction services to approximately 35 customers. Its customers consist of national oil companies, major and independent oil and gas companies, energy companies and their affiliates.
The Company's marine fleet has a range of capabilities, and performs construction projects, primarily in water depths up to 1,000 feet. Its fleet consists of nine operational vessels, which are American Horizon, Lone Star Horizon, Brazos Horizon, Pecos Horizon, Canyon Horizon, Atlantic Horizon, Pacific Horizon, Sea Horizon and Texas Horizon. Horizon acquired Texas Horizon in February 2006. American Horizon, Lone Star Horizon, Brazos Horizon and Pecos Horizon are pipelay and pipebury vessels, which are able to install, bury and repair pipelines with an outside diameter (including concrete coating) of up to 39 inches. These vessels employ conventional S-lay technology that is suitable for operating on the United States continental shelf and the international areas, where the Company operates.
For larger pipe burying projects or where deeper trenching is required, the Company uses the Canyon Horizon, its bury barge. Horizon matches its burying approach to the requirements of each specific contract by using the Canyon Horizon for larger projects, and its towed jet sleds behind pipelay barges for smaller projects. The Company also installs and removes or salvages offshore fixed platforms. It operates two derrick barges equipped with cranes designed to lift and place platforms, structures or equipment into position for installation. In addition, they are used to disassemble and remove platforms and prepare them for salvage or refurbishment. The Pacific Horizon has a lift capacity of 1,000 tons, and the Atlantic Horizon has a 550-ton lift capacity.
The Sea Horizon, the Company's 360-foot long and 100-foot wide combination vessel that has both pipelay and derrick capabilities, is utilized to install up to 36-inch diameter pipe. The Sea Horizon is also utilized to install and remove offshore fixed platforms and has a lift capacity of 1,200 tons. The Texas Horizon is a dynamically positioned data processing technician second class (DP 2) deepwater construction and pipelay vessel. It is capable of providing diving and remotely operated vessel (ROV) support, as well as installing small diameter rigid pipe, flexible pipe, coiled tubing and umbilicals in deep water. The Company's contracts in the United States Gulf of Mexico are typically of short duration, being completed in periods as brief as several days to periods of up to several months for projects involving its larger pipelay vessels. International construction projects typically have longer lead times and extended job durations. Horizon owns all of its vessels.
Operating results are directly tied to industry demand for services, and to a lesser degree, seasonal impact. The demand for services depends on the level of capital expenditures by oil and gas companies for developmental construction. Due to the time required to drill a well and fabricate a production platform, demand for services usually lags exploratory drilling by nine to eighteen months and sometimes longer. The demand for offshore construction services depends largely on the condition of the oil and gas industry and, in particular, the level of capital expenditures by oil and gas companies for developmental construction, as well as repair and salvage work. These capital expenditures are influenced by:
Horizon competes with Global Industries, Ltd., Helix Energy Solutions Group, Inc., Chet Morrison Contractors, Inc., Bisso Marine Co., Diamond Services, Corp., Offshore Specialty Fabricators, Inc., TETRA Technologies, Inc., Manson Gulf L.L.C., J. Ray McDermott, S.A., Protexa S.A. de C.V. and Oceanografia S.A. de C.V.
Cal Dive International (DVR), a marine construction company, is acquiring Horizon Offshore in a stock and cash deal valued at approximately $650 million. Horizon shareholders will receive a combination of 0.625 DVR shares and $9.25 in cash for each HOFF share they own.